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PVM Midday Report 27 January 2015

Published Tuesday, January 27th, 2015

Headlines

  1. EU leaders threaten Russia with further sanctions
  2. UBS trims 2015 Brent and WTI price forecast to $52.50 & $ 49 bbl respectively
  3. Excess Chinese crude supplies surpass 90 million bbls in 2014, up 40% y/y
  4. Oil tankers on Libyan voyages set to face higher costs and waning insurance cover
  5. UK economy expands 0.5% in 4Q ’14, misses expectations of 0.6%

Fundamentals

Economy: European equities are retreating from multi-year highs as a string of poorly-received corporate results and uncertainty over Greece’s future in the eurozone suppresses risk appetite – the Eurofirst 300 is slipping 0.6%. Greek stocks and bonds are adding to their post-election losses as investors grow increasingly cautious over the new government’s desire to renegotiate the country’s bailout package. The risk-off mood and looming ECB government-bond purchases are keeping core debt yields close to record lows while the euro gains 0.3% against the dollar. Benchmark US Treasuries are steady ahead of the first Fed policy meeting of the year where traders will be looking for clues on rate normalisation timing and a reaction to last month’s soft wage growth data. Russian assets are recovering their poise following yesterday’s sharp sell-off although it may prove to be short-lived as European leaders threaten to introduce further sanctions as the conflict in eastern Ukraine intensifies.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.